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- Title
THE EFFECT OF ADOPTING A NEW TAX ON REVENUE GROWTH: EMPIRICAL ESTIMATES OF PENNSYLVANIA'S HOTEL TAX.
- Authors
Stine, William F.
- Abstract
This study investigates the effect of the adoption of a new hotel tax on Pennsylvania's county government revenues. It provides specific estimates of how the average annual growth rates for county taxes and total revenues changed after the adoption of the new hotel tax. Regression equations are estimated in which dummy variables are used to test for both temporary changes and permanent changes in total county government revenue and real estate taxes. The results suggest that only total county government revenues experienced both higher permanent and temporary increases while the real estate tax showed no evidence of change during hotel tax years. The results also suggest that county governments adopting the hotel tax became less reliant on the real estate, the main source of county taxes. The results imply that the hotel tax supplemented total county government revenues, but did not replace the property tax. While the results from this study are of limited scope, they give new insights about the effects of alternative revenue sources in a period when state and local government budgets are becoming more constrained.
- Subjects
PENNSYLVANIA; HOTEL taxation; GOVERNMENT revenue; FEDERAL budgets; TAXATION
- Publication
Pennsylvania Economic Review, 2011, Vol 18, Issue 1, p78
- ISSN
1531-0949
- Publication type
Article